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Green Real Estate Law JournalDiscussing current issues in construction and real estate law as they relate to sustainability, from the perspective of owners, builders, and design professionals. Published by Stephen Del Percio, B.Eng., J.D., LEED AP.

LEED 2009 Creeps Into New York City’s Greener, Greater Buildings Plan

Back in December, the City Council passed four pieces of legislation which Mayor Bloomberg introduced last April as part of his “Greener, Greater Buildings Plan” for New York City. Predictably, building owners had immediately opposed one of the bills (Int. 967: Audits & Retrocommissioning), which would have required them to implement a bundle of energy efficiency upgrades with a payback period of less than five years after the results of a rolling audit process. While auditing remains part of the approved legislation, owners will not be required to make the improvements, which will now just be identified based on a “reasonable” payback period. (Public buildings, however, must still install any retrofit measure that the audit pegs with less than a seven-year payback.)

Although the costs of auditing were raised by opponents to the bills earlier this year, mandatory energy audits are now required every ten years, though buildings certified under LEED 2009 for Existing Buildings: Operations & Maintenance or which receive EPA’s Energy Star label are exempt. It’s this exemption that’s of particular interest to us here at GRELJ; here’s the pertinent text from the body of the bill:
No energy audit is required if the building complies with one of the following as certified by a registered design professional:

The covered building has received an EPA Energy Star label for at least two of the three years preceding the filing of the building’s energy efficiency report.

There is no EPA Energy Star rating for the building type and a registered design professional submits documentation, as specified in the rules of the department, that the building’s energy performance is 25 or more points better than the performance of an average building of its type over a two-year period within the three-year period prior to the filing of an energy efficiency report consistent with the methodology of the LEED 2009 rating system for Existing Buildings published by USGBC, or other rating system or methodology for existing buildings, as determined by the department.

The covered building has received certification under the LEED 2009 rating system for Existing Buildings published by the USGBC or other rating system for existing buildings, as determined by the department, within four years prior to the filing of the building’s energy efficiency report.

Legislation which incorporates LEED into local-level legislation is something we’ve noted frequently here at GRELJ, and a couple of recurring issues immediately come to mind with Int. 967.

First, although the bill does allow buildings to earn certification under “other rating systems as determined by [DOB],” the bill does not provide any input on what those other systems might be, or how DOB will “determine” those that would qualify a building for the exemption. Does this language sufficiently address non-delegation doctrine concerns? (i.e., a private third-party organization is effectively determining whether an energy audit is unnecessary under Int. 967 by proxy).

Second, there is no language that allows the legislation to track changes in LEED; for example, if USGBC releases a next-generation LEED system subsequent to LEED 2009, what happens? We have noted this specific issue recurring in various types of legislation. For example, when we wrote about San Francisco’s decision to reconsider its LEED-driven green building ordinance, we pointed out that “LEED itself continues to be a moving target and policymakers must guide themselves accordingly when considering the merits of [LEED-driven] legislative activity.”

Finally, could design professionals balk at signing off on the energy audits given that LEED-EBOM is subject to the same Minimum Program Requirements which, if violated by the building owner, could result in a decertification proceeding, the consequences of which remain unclear?

These questions are obviously theoretical at this point and are designed to elicit your thoughts in the comments. However, I want to stress that the New York City legislation emphasizes the import of assessing and understanding LEED-related risks as the rating system continues to permeate into the private sector in a variety of legislative contexts.

Just as a side note for your reference, the other three bills that constitute the “Greener, Greater Buildings Plan” are:

Int. 564: New York City Energy Conservation Code. Closes the “50 percent loophole” in the current New York City Energy Code, which does not require owners who renovate less than 50 percent of their building’s total space to comply with the most current – and energy-efficient- version of the Code.

Int. 476: Benchmarking. Requires buildings to perform an annual assessment of their water and energy use using EPA’s Portfolio Manager tool for the purpose of comparing themselves with their peers, but exempts certain buildings for which public disclosure would be problematic (i.e. high energy users such as data centers).

Int. 973, Lighting Retrofits and Submetering. Requires large tenants to be submetered and lighting systems to be upgraded during renovations (whether or not those renovations contemplate electrical work) or, at the latest, by 2025. Residential tenants are exempt. Renovations where construction costs are less than $50,000 are also exempt.

Other than the revisions to the Energy Conservation Code under Int. 564, the legislation applies to all New York City buildings larger than 50,000 square feet (or buildings that stand on the same tax lot and, together, are larger than 100,000 square feet).

About Stephen Del Percio

Stephen Del Percio, B.Eng, J.D., LEED AP, is an experienced construction and real estate lawyer with over a decade of experience in the New York City construction industry. He is also a frequent lecturer and author on numerous industry topics, with particular emphasis on legal issues related to green building and sustainability. He holds a B.S. in civil engineering from Columbia and worked as a project manager for Morse Diesel/AMEC Construction Management on a number of construction projects in New York City prior to attending law school. He earned his J.D. at William & Mary, where he also served as the Managing Editor of the Environmental Law & Policy Review. You can contact him at stephen@gbNYC.com.

When you say these are “obviously theoretical” issues, I have to endorse that part heartily! In general terms, my feeling is that because there are multiple paths to compliance, a lot of these concerns are inconsequential. Let me take your main concerns item by item:

1) Regarding delegation to a private entity, it seems to me that USGBC doesn’t have any kind of meaningful choke-hold on this. You can do the audit, get an Energy Star, show your >75th-percentile energy performance if Energy Star isn’t applicable, or your fourth avenue is to obtain LEED-EB. In practical terms, the Energy Star is probably easiest if your performance is good; failing that, the once-a-decade audit report is probably the simplest approach to compliance. (Remember, you have to collect the same consumption data, and use a design professional to certify your Energy Star applications and also to seal these city energy audit papers, so Energy Star is not going to be too much cheaper/simpler than having that same professional do an audit/report.) LEED-EB is a more costly and complex compliance option included to recognize the efforts of owners who go above and beyond. I agree there maybe ought to be some guidance for DOB regarding how to select alternative rating systems, but otherwise I don’t see the problem.

2) Regarding tracking changes in LEED-EB: First, USGBC will stop allowing LEED-EB-2009 applications at some future point after an updated version supersedes LEED 2009. So if you insist on assuming the NYC rules are never revised, the LEED certification compliance path would just become unavailable (leaving three others). In fact, there is language allowing DOB to track LEED changes — I can’t see why DOB couldn’t just recognize the new edition of LEED as a rating system compliance path. Second, isn’t this the same issue “model code” standards have? For example, ASHRAE 90.1-2007 doesn’t automatically supersede -2004 as the NYS energy code; the legislature has to change it. No big deal; it’s normal maintenance of your laws and codes. What’s the crisis?

3) I also can’t see what the risk is if a design professional attests that a building has obtained LEED-EB, presuming that’s true at the time of signing and that they aren’t aware of material defects in the LEED application. If the building owner can’t keep the certification (i.e. it later got revoked for violating the MPRs or any other reason), they’d presumably have to meet the audit legislation’s requirement through any of the other paths, and/or face the penalties for non-compliance. That falls on the owner — I can’t see how it would reflect back to liability for the design professional, whose truthful statement to the city was that the building was awarded LEED-EB by GBCI, not that it complies and will continue to comply with LEED-EB.

Many of your posts point out real, sticky legal issues — but this time I think you’ve over-projected your typical legitimate concerns into something less than substantial.

The proposed plan is a huge step in making the greatest city in the world greener and all the answers are not so easy to come by. It takes lots of effort to change the carbon footprint of a major city like NYC. Instead of pointing out all the flaws maybe we can provide suggestions on how we can improve the program.

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[...] 2010 | 0 comments Last night, I sat on a panel that discussed – among other issues – New York City’s Greener, Greater Buildings Plan, so I thought it would be timely to revisit each of the four pieces of legislation that comprise [...]

[...] San Francisco, D.C., and New York City. But as we’ve noted here previously, New York’s exempts certain buildings for which public disclosure of water and energy use would be problematic (like high energy users [...]